Smaller software-as-a-service (SaaS) players have captured the dominant market share in Asia over larger, established vendors, according to the latest Springboard Research study.
Local ISVs (independent software vendors) and smaller global vendors have taken an estimated 54 percent of the SaaS market in the region, said Springboard in a statement.
The rest of the market is dominated by established vendors, with Salesforce.com and WebEx taking the biggest share of that segment, added Springboard.
Balaka Aggarwal, senior manager for emerging software at Springboard, said one of the reasons for the smaller players' success is that the SaaS model has given them as much reach and access to customers as the larger vendors have.
Smaller players have also relied on niche applications not provided by larger players to corner the market. The players' localized knowledge specific to small and medium-sized businesses (SMBs) is also triggering SaaS uptake in smaller companies, added Aggarwal.
"Riding on the wave of increased Internet usage, small software providers with niche applications have not only tapped the local markets, but have started expanding beyond national boundaries," said Aggarwal.
Even though CRM and collaboration applications are bringing in the largest SaaS revenues, there is an increasing trend of new applications outside of the two categories emerging in the Asia-Pacific market, said Springboard.
Aggarwal said: "Our data shows that Asian organizations are aware of and are using many different types of SaaS applications," adding that the more popular categories are office applications such as word processing and spreadsheet programs, e-mail, security and compliance and human resource management applications.
An earlier Springboard report released December 2007 estimated the CRM segment of the SaaS market in the Asia-Pacific region grew by 68 percent in 2007, and predicted it to reach US$460 million by 2010.
Furthermore, Springboard expects demand from the SMB segment for "simpler" CRM offerings to drive SaaS CRM vendors to supply stripped-down, SMB-specific applications.
Springboard's report identified some local vendors that have done "remarkably well" in the region: China's 800CRM, India's HRMantra.com, Singapore's Justlogin and Nothacker and India's Pyxis.